To see how this is all likely to play out doesn't require a stinger of Owlsley and a crystal ball. All you have to do is look at some recent beneficiaries of the very same process and see how they're doing. Having been slapped down in public by the Congress and the media, are they chastened and correcting their previously appallingly greedy and inhumane behavior? Um, based on two recent stories, not exactly. (Both links via the indefatigable Mark G.)

[H]ow good is the legislation on the table, the bill put together by Senator Chris Dodd of Connecticut?

Not good enough. It's a good-faith effort to do what needs to be done, but it would create a system highly dependent on the wisdom and good intentions of government officials. And as the history of the last decade demonstrates, trusting in the quality of officials can be dangerous to the economy's health.

"Good faith effort"? That's pushing the benefit of the doubt past the breaking point. The admittedly minimal House bill was a "good faith effort" if your definition of "good faith" is an effort to just barely control the worst of Wall Street's usual financial scams, shenanigans, and skullduggery. Dodd's bill is a bad faith effort to make non-reform smell like reform, thus keeping Wall Street happy with him so his life-after-the-Senate will be a very comfortable one.

The path to passage of the financial "reform" bill is fraught with characteristic obstacles provided by the usual suspects. The bankers don't want to be regulated and the BD/GOP wants whatever the bankers want. Now that the two bills, Barney Frank's House bill and Chris Dodd's Senate bill, can be put side-by-side and compared, it won't take long to figure out what the sticking point's going to be. Pretty much the same sticking point that always stops such bills.

I've been following the productions of the Banking Reform Comedy Club for about a decade now, and two of the main skits - "Credit Card Reform" and "Regulatory Reform" - were performed this past week. The former I was going to write about some time ago but then I decided to wait and see how banks reacted to it. Well, it went into effect on Monday of last week and Sam Pizzigati tells you how it worked out so I don't have to. (Via Norwegianity)

On Monday, the new credit card reform law enacted last year - legislation designed to protect consumers from excessive credit card fees and penalties - went into effect.

By Wednesday, consumer watchdogs at the Demos think tank in New York were reporting that banks nationwide were blitzing consumers with "a wide range of new and excessive fees and penalties" that sidestep the new law's prohibitions.

If you still have active credit cards I strongly advise you to read his column so you'll at least know how they're ripping you off even if you can't stop it.

But it's the latter skit I want to review today because it's such a classic example of its type. All the comic elements are there: hypocrisy, pretense, slapstick self-promotion, witless pseudo-Fieldsian exaggeration, and bipartisan clown-car pratfalls with Ace Clown Chris Dodd playing lead.

Sen. Chris Dodd appears obsessed with getting a bipartisan financial
reform package through the Senate Banking Committee, no matter if it
makes a mockery of reform, no matter if it includes virtually nothing
to protect consumers or deal with the problem of “too big to fail”
financial firms. He’s already seeking to drop the Volcker rule put forward by the White House that would limit proprietary trading from banks....

But masaccio, my favorite go-to guy for explanations of financial skullduggery, writing on the same topic, couldn't care less. The rule, he says, is a joke anyway.

OK, hard lesson: probably not. The bail-out restrictions the Democrats have on the table are maybe important for the fairness issue (a political decision they may go for because they're hoping the tar-and-feathers waiting for Wall Street bankers won't stick to them) but it's hardly sufficient to reverse a process that may very well have gone beyond the PONR and most likely has. (via Avedon)

Most
people don't understand what happened on Thursday, but the build-up of
bad news on the Lehman default and the $85 billion government takeover
of AIG, triggered a run on the money markets and a freeze in interbank
lending. The overnight LIBOR rate (London Interbank Offered Rate) more
than doubled to 6.44 per cent. Bank of America reported overnight
borrowing rates in excess of 6 per cent. Longer-term LIBOR rates also
rose sharply. On Wednesday, jittery investors removed their money from
money markets and flooded short-term US Treasurys for the assurance of
a government guarantee on their savings even though interest rates had
turned negative which means that their balance would actually shrink at
the date of maturity. This is unprecedented, but it does help to
illustrate how raw fear can drive the market.

The
TED spread (the TED Spread measures market stress by revealing the
reluctance of banks to lend to each other) widened and the credit
markets froze in place. Borrowing three-month dollars on the interbank
market and the U.S. Treasury's three-month borrowing costs widened five
full percentage points. That's huge. The banking system shut down.

What
does it mean? It means the Federal Reserve has lost control of the
system. The market is driving interest rates now, and the market is
terrified. End of story.

Former White House adviserKarl Rove defied a congressional subpoena and refused to testify Thursday about allegations of political pressure at the Justice Department, including whether he influenced the prosecution of a former Democratic governor of Alabama.

Rep. Linda Sanchez, chairman of a House subcommittee, ruled with backing from fellow Democrats on the panel that Rove was breaking the law by refusing to cooperate — perhaps the first step toward holding him in contempt of Congress.

Lawmakers subpoenaed Rove in May in an effort to force him to talk about whether he played a role in prosecutors' decisions to pursue cases against Democrats, such as former Alabama Gov. Don Siegelman, or in firing federal prosecutors considered disloyal to the Bush administration.

Rove had been scheduled to appear at the House Judiciary subcommittee hearing Thursday morning. A placard with his name sat in front of an empty chair at the witness table, with a handful of protesters behind it calling for Rove to be arrested.

Why TurdBlossom doesn't have to worry:

A decision on whether to pursue contempt charges now goes to the full Judiciary Committee and ultimately to House Speaker Nancy Pelosi.

Pelosi is DLC and their strategy is to NEVER challenge Bush or the Republicans because that would make the Democrats look weak, a strategy Glenn Greenwald calls "Strength through bowing". Glenn notes the AP Headline "Senate bows to Bush" and notes:

Their rationale for doing that is that it prevents the Republicans from depicting them as "weak," because nothing exudes strength like bowing.

We have to arrest Rove for contempt or Congress, whose credibility is all but gone, will vanish like a night wind and everybody will ignore everything Congress wants from this point on. It has already gone waaaaay too far.

Your calls and emails worked! We just got word that Senators Dodd and Feingold will step up as progressive leaders and filibuster this legislation. Here's part of the joint statement they just released:

"We
will oppose efforts to end debate on this bill as long as it provides
retroactive immunity for the telecommunications companies."1

Call your Senators and demand support for the filibuster. Call Dodd and Feingold and make sure they stand by this latest sort-of-promise by thanking them for protecting and defending the Constitution with a filibuster of the FISA bill.

Bang for the Buck: Boosting the American Economy

Compassionate Conservatism in Action

Molly

"We are the deciders. And every single day, every single one of us needs to step outside and take some action to help stop this war."

Zinn

"[O]ur time, our energy, should be spent in educating, agitating, organizing our fellow citizens in the workplace, in the neighborhood, in the schools. Our objective should be to build, painstakingly, patiently but energetically, a movement that, when it reaches a certain critical mass, would shake whoever is in the White House, in Congress, into changing national policy on matters of war and social justice."

Bono

"True religion will not let us fall asleep in the comfort of our freedom. Love thy neighbor is not a piece of advice, it's a command. ...

God, my friends, is with the poor and God is with us, if we are with them. This is not a burden, this is an adventure."

The Reverend Al Sharpton

Ray wasn't singing about what he knew, 'cause Ray had been blind since he was a child. He hadn't seen many purple mountains. He hadn't seen many fruited plains. He was singing about what he believed to be.

Mr. President, we love America, not because of all of us have seen the beauty all the time.

But we believed if we kept on working, if we kept on marching, if we kept on voting, if we kept on believing, we would make America beautiful for everybody.

Marx

''With adequate profit, capital is very bold. A certain 10 percent will ensure its employment anywhere; 20 percent will produce eagerness, 50 percent positive audacity; 100 percent will make it ready to trample on all human laws; 300 percent, and there is not a crime which it will not scruple, nor a risk it will not run, even to the chance of its owner being hanged.''